Every week, Simply Money’s Nathan Bachrach, Ed Finke and Amy Wagner answer your financial questions. If you, a friend, or someone in your family has a money issue or problem, please feel free to send those questions to yourmoney@enquirer.com.

Greg: I work at P&G and we just found out they’re adding a Roth 401(k) option to our plan. Is this something I should be using?

Answer: This is fantastic news! Because of its tax advantages, a Roth 401(k) is a great tool to have in your retirement planning arsenal.

A Roth 401(k) works the same as a Roth IRA: you make contributions with after-tax money, and then, once you’ve held the account for at least five years and you’ve reached 59 ½ years old, you can withdraw earnings tax-free. So while you don’t get the up-front tax break like a traditional 401(k) affords you, you’re still getting a tax break – it’s just coming at a different point in time.

And this can be a big deal. Consider this: if you have $200,000 in your traditional 401(k), you need to realize that money isn’t all yours. The government gets its cut when you take money out in retirement. For instance, if you’re in the 22 percent tax bracket at the time of withdrawal, you really only have $156,000. Conversely, if you have $200,000 in a Roth 401(k), that entire $200,000 belongs to you (assuming you’ve met all the requirements).

One big difference between a Roth IRA and a Roth 401(k)? While a Roth IRA has income eligibility limits, a Roth 401(k) does not! So no matter your income, you can utilize the tax-free advantages of a Roth 401(k).

Keep in mind that the $18,500 contribution limit for 2018 (or $24,500 if you’re older than 50) applies to both your traditional 401(k) and your Roth 401(k) combined. (Note: If P&G considers you a “highly compensated employee” (HCE), your limits will be different.)

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The Simply Money Point is that a Roth 401(k)’s tax-free growth can give your money some flexibility in retirement by lessening your tax burden. While we generally recommend using this type of account, always be sure to consult with a trusted tax professional and financial advisor.

Jeannie in Warren County: I’m 63, widowed, and live alone. I live on my Social Security benefit and the survivor’s benefit of my husband’s pension. I’ve had a salesperson approach me about getting a reverse mortgage to help increase my income, which sounds ideal. Am I missing something?

Answer: No matter what a salesperson may have told you, we want you to know this right off the bat: a reverse mortgage is not “free money” like it’s so often marketed – it’s a loan.

Here’s what’s going on: with a regular mortgage, you make payments to the lender every month to build equity and eventually own your home out-right. However, with a reverse mortgage, it works in the opposite: the lender uses that equity you’ve built up to pay you. You’re basically borrowing against your home’s equity. And while you usually don’t have to pay the money back for as long as you live in your home, that money does need to be paid back (by either you or your estate) when you move, sell, or pass away.

What’s more, interest will continue to accrue over the life of the reverse mortgage, meaning you’ll owe more over time. This is the one time when compounding interest can actually work against you.

Reverse mortgages also have associated fees such as origination fees, closing costs, mortgage insurance and service fees. And you’re not out of the woods in regards to other home-related expenses. You’ll have to continue paying property taxes, insurance, and the cost of maintaining your home.

With all that said, there are instances in which it can make sense for a homeowner to get a reverse mortgage (for example, helping a homeowner in their 80s or 90s stay in their home) – but this type of product should still be viewed only as a financial last resort.

Here’s The Simply Money Point: A reverse mortgage isn’t the “no brainer” that many salespeople or late-night infomercials want you to believe. But if you’re seriously considering one, be sure to get an unbiased, second opinion from someone like a CERTIFIED FINANCIAL PLANNER™ or a Chartered Financial Consultant® about whether it makes sense for your particular financial situation. And for more information to help better educate yourself, visit the Federal Trade Commission’s website.

Responses are for informational purposes only and individuals should consider whether any general recommendation in these responses are suitable for their particular circumstances based on investment objectives, financial situation and needs. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing, including a tax advisor and/or attorney. Nathan Bachrach and Ed Finke and their team offer financial planning services through Simply Money Advisors, a SEC Registered Investment Advisor. Call (513) 469-7500 or email simplymoney@simplymoneyadvisors.com.